Saturday, August 19, 2017

On ISO standardization of blockchains

So ISO, the primary international standards organization, is seeking to standardize blockchain technologies. On the surface, this seems a reasonable idea, creating a common standard that everyone can interoperate with.

But it can be silly idea in practice. I mean, it should not be assumed that this is a good thing to do.

The value of official standards

You don't need the official imprimatur of a government committee for something to be a "standard". The Internet itself is a prime example of that.

In the 1980s, the ISO and the IETF (Internet Engineering Task Force) pursued competing standards for creating a world-wide "internet". The IETF was an informal group of technologist that had essentially no official standing.

The ISO version of the Internet failed. Their process was to bring multiple stakeholders from business, government, and universities together in committees to debate competing interests. The result was something so horrible that it could never work in practice.

The IETF succeeded. It consisted of engineers just building things. Rather than officially "standardized", these things were "described", so that others knew enough to build their own version that interoperated. Once lots of different people built interoperating versions of something, then it became a "standard".

In other words, the way the Internet came to be, standardization followed interoperability -- it didn't create interoperability.

In the end, the ISO gave up on their standards and adopted the IETF standards. The ISO brought no value to the development of Internet standards. Whether they ratified the Internet's "TCP/IP" standard, ignored it, or condemned it, the Internet would exist today anyway, and a competing ISO-blessed internetwork would not.

The same question exists for blockchain technologies. Groups are off busy innovating quickly, creating their own standards. If the ISO blesses one, or creates its own, it's unlikely to have any impact on interoperability.

Blockchain vs. chaining blocks

The excitement over blockchains is largely driven by people who don't know the details, who don't understand the difference between a blockchain like Bitcoin and the problem they are trying to solve.

Consider a record keeping system, especially public records. Storing them in a blockchain seems like a natural idea.

But in fact, it's a terrible idea. A Bitcoin-style blockchain has a lot of features you don't want, like "proof-of-work" signing. It is also missing necessary features, like bulk storage with redundancy (backups). Sure, Bitcoin has redundancy, but by brute force, storing the blockchain in thousands of places around the Internet. This is far from what a public records system would need, which would store a lot more data with far fewer backup copies (fewer than 10).

The only real overlap between Bitcoin and a public records system is a "signing chain". But this is something that already existed before Bitcoin. It's what Bitcoin blockchain was built on top of -- it's not the blockchain itself.

It's like people discovering "cryptography" for the first time when they looked at Bitcoin, ignoring the thousand year history of crypto, and now every time they see a need for "crypto" they think "Bitcoin blockchain".

Consensus and forking

The entire point of Bitcoin, the reason it was created, was as the antithesis to centralized standardization like ISO. Standardizing blockchains misses the entire point of their existence. The Bitcoin manifesto is that standardization comes from acclamation not proclamation, and that many different standards are preferable to a single one.

This is not just a theoretical idea but one built into Bitcoin's blockchain technology. "Consensus" is achieved by the proof-of-work mechanism, so that those who do the most work are the ones that drive the consensus. When irreconcilable differences arise, the blockchain "forks", with each side continuing on with their now non-interoperable blockchains. Such forks are not a sin, but part of the natural evolution.

We saw this with the recent fork of Bitcoin. There are now so many transactions that they exceed the size of blocks. One group chose a change to make transactions smaller. Another group chose a change to make block sizes larger.

It is this problem, of consensus, that is the innovation that Bitcoin created with blockchains, not the chain signing of public transaction records.

Ethereum

What "blockchain standardization" is going to mean in practice is not the blockchain itself, but trying to standardize the Ethereum version. What makes Ethereum different is the "smart contracts" programming language, which has financial institutions excited.

This is a bad idea because from a cybersecurity perspective, Ethereum's programming language is flawed. Different bugs in "smart contracts" have led to multiple $100-million hacks, such as the infamous "DAO collapse".

While it has interesting possibilities, we should be scared of standardizing Ethereum's language before it works.

Conclusion

People who matter are too busy innovating, creating their own blockchain standards. There is little that the ISO can do to improve this. Their official imprimatur is not needed to foster innovation and interoperability -- if they are consequential at anything, it'll just be interfering.